Renewable additions up 50pc to new record in 2023: IEA

Spanish Market: Electricity, Emissions
11/01/24

Global renewable power additions rose by almost 50pc on the year to an estimated 507GW in 2023, a fresh record high, spurred by "continuous policy support", energy watchdog the IEA said today.

The additions — three-quarters of which were solar power — beat the IEA's previous estimate for the year of 440GW. Renewable capacity additions set a new record high for a 22nd consecutive year, the IEA added in its Renewables 2023 report.

The IEA forecasts that total global installed renewables capacity will reach 7.3TW by 2028 "under existing policies and market conditions". Under an "accelerated scenario", also to 2028, "more rapid policy implementation drives renewable power capacity growth 21pc higher than in the main forecast".

"It's not enough yet to reach the Cop 28 goal of tripling renewables, but we're moving closer — and governments have the tools needed to close the gap," IEA executive director Fatih Birol said. More than 120 countries agreed in December at the UN Cop 28 climate summit to triple renewable energy capacity to 11TW by 2030. The IEA uses installed renewables capacity in 2022, at 3.65TW, as its baseline year. But reaching the Cop 28 pledge will "hinge on" financing and deploying renewables in emerging and developing economies, "many of which are being left behind in the new energy economy", Birol cautioned.

Globally, renewables are set to overtake coal to become the biggest source of power generation by "early 2025", the IEA estimated. Solar and wind will account for 95pc of the expansion.

Europe, the US and Brazil all had record increases in renewable capacity in 2023, but "China's acceleration was extraordinary", the IEA noted. China will "deploy almost four times more renewable capacity than the EU and five times more than the US" over 2023-28, the agency said.

Growth in solar and onshore wind additions to 2028 is expected to "more than double" compared with the past five years in the US, the EU, India and Brazil, the IEA found. This is driven by "supportive policy environments" such as the US' Inflation Reduction Act, but also by the "improving economic attractiveness" of the technologies — particularly as consumers look to cut electricity bills.

Cost efficiencies

Wind and solar power "will become more cost-competitive" up to 2028, the IEA's forecast period for the report, the agency found. Almost all newly-installed onshore wind and solar had lower generation costs than new coal and gas plants in 2023, while around three-quarters of them "offered cheaper power than existing fossil fuel facilities", it added.

Falling prices for solar power modules, on the back of increased manufacturing capacity, has helped to improve cost efficiencies. Spot prices for solar modules in 2023 fell by nearly 50pc on the year, as production capacity rose threefold from 2021 levels. It is likely to reach 1.1TW this year and 1.3TW in 2028, the IEA found. Policy support in the US and India has led to "unprecedented [solar] manufacturing expansion" in those countries, but China is expected to retain the lion's share of global supply chains, at 80-95pc, depending on the sector.

The IEA noted challenges for wind, especially in the offshore sector, related to "ongoing supply chain disruptions, higher costs and long permitting timelines". Inflation has increased equipment costs, while higher interest rates mean that financing costs have risen, while policy has been "relatively slow to adjust", the IEA said.

Governments should ensure a "rapid" response to obstacles including grid connections, permitting and financing to enable renewables growth, the IEA said.

By Georgia Gratton

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31/10/24

US biofuel feedstock use dips in August

New York, 31 October (Argus) — Renewable feedstock usage in the US was down slightly in August but still near all-time highs, even as biomass-based diesel production capacity slipped. There were nearly 3.5bn lbs of renewable feedstocks sent to biodiesel, renewable diesel, and sustainable aviation fuel production in August this year, up from fewer than 3bn lbs a year prior, according to the US Energy Information Administration's (EIA) latest Monthly Biofuels Capacity and Feedstocks Update report. August consumption was 0.4pc below levels in July and 0.5pc below record-high levels in June. US soybean oil consumption for biofuels rose to 39.3mn lbs/d in August, up by 2.1pc from a year earlier on a per-pound basis and up 6.9pc from a month prior. The increase was entirely attributable to increased usage for renewable diesel production, with the feedstock's use for biodiesel slipping slightly from July. Canola oil consumption for biofuels hit 14.2mn lbs/d, up by 58.1pc from a year prior on a per-bound basis but still 19.4pc below record-high levels in July. Distillers corn oil usage, typically less volatile month-to-month than other feedstocks, bucked that trend to hit a high for the year of 13.6mn lbs/d in August. That monthly consumption is up 13.6pc from a year earlier and 20.9pc from a month earlier. Among waste feedstocks, usage of yellow grease, which includes used cooking oil, rose to 22.4mn lbs/d in August, up 13.8pc from levels a year prior and 5.8pc from levels in July. Tallow consumption for biofuels was at 18.6 mn lbs/d over the month, an increase of 27.8pc from August last year but a decrease of 13.4pc from July this year. Production capacity of renewable diesel and similar biofuels — including renewable heating oil, renewable jet fuel, renewable naphtha, and renewable gasoline — was at 4.6bn USG/yr in August, according to EIA. That total is 24.1pc higher than a year earlier and flat from July levels. US biodiesel production capacity meanwhile declined to fewer than 2bn USG/yr over the month, down by 4.3pc from a year earlier and 1.3pc from a month earlier. US biomass-based diesel production capacity has expanded considerably in recent years, but refiners have recently confronted challenging economics as ample supply of fuels used to comply with government programs has helped depress the prices of environmental credits and hurt margins. The industry is also bracing for changes to federal policy given this year's election and a new clean fuel tax credit set to kick off in January. That credit, known as "45Z", will offer a greater subsidy to fuels that produce fewer greenhouse gas emissions, likely encouraging refiners to source more waste feedstocks over vegetable oils. That dynamic is already shaping feedstock usage this year, with Phillips 66 executives saying this week that the company's renewable fuels refinery in California is currently running more higher carbon-intensity feedstocks ahead of a shift to using more waste early next year. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

China trade tensions could cloud climate summit

31/10/24

China trade tensions could cloud climate summit

China argues that its industrial emissions are needed to provide technology and goods for the global energy transition London, 31 October (Argus) — As the world's leading greenhouse gas emitter, China will struggle to align its reduction efforts closer to those required under the Paris Agreement's 1.5°C global warming target while at the same time fending off trade barriers. "It is imperative to properly handle the relationship between new energy and traditional energy," President Xi Jinping said earlier this year. Chinese CO2 emissions posted zero year-on-year growth in the third quarter, despite a rebound in coal-fired output, as clean power generation also grew rapidly, Helsinki-based Centre for Research on Energy and Clean Air (CREA) says. But Beijing remains guarded on whether its CO2 emissions have peaked, with coal still an integral part of its energy mix. It has set a 2030 target for peak emissions but will likely reach this some years early, the country's new climate envoy, Liu Zhenmin, says. "If we want to achieve global carbon [neutrality], first we have to provide the world with more affordable, secure technology. Second, we need to address financing," Liu says, referring to the finance requested by developing countries from developed countries to enable the former to reach their climate targets. China is set against being dragged into contributing to the new climate finance goal, despite calls from developed countries for it to do so. China deals with climate action on its own terms. It opted out of a pledge to treble renewable power capacity and double energy efficiency at last year's UN Cop 28 climate summit in Dubai, although it did agree to the final conference text, which made mention of the pledge. China's nationally determined contribution (NDC) includes a target date for reaching peak CO2 emissions, but lacks clear goals for peaking emissions of other greenhouse gases such as methane. Beijing is due to update its NDC by February. To remain in line with the Paris accord's 1.5°C target, the new NDC will need to aim for an at least 30pc reduction in CO2 emissions from 2023 levels by 2035 and set absolute reduction targets, CREA says. And sales of new energy vehicles (NEVs) — battery electric, plug-in hybrid and fuel-cell vehicles — need to account for 60pc of total new car sales by 2035, from 50pc currently, to drive transport sector emissions down to 2020 levels, CREA says. China had nearly 25mn NEVs on its roads in June and is on course to quadruple this figure by 2030. Its renewable power capacity has already surpassed a 1.2TW target for 2030, enabling Beijing to cut its approvals for new coal-fired power plants by almost 80pc on the year in January-June, according to environmental group Greenpeace. But China's coal production capacity continues to increase. Chinese power demand is set to rise by more than 500 TWh/yr in the next 5-10 years. Beijing could meet this demand with more renewable and nuclear power generation, but nuclear currently holds a mere 5pc share of China's electricity mix. Brace brace China had seemingly narrowed its climate policy differences with the US in terms of approach and objectives, and played a role alongside the US in bringing a consensus around fossil fuels language at Cop 28. But China is bracing for a showdown on climate finance at Cop 29 in Baku next month. China and advanced economies accounted for more than 95pc of electric vehicle (EV) sales in 2023, energy watchdog the IEA says. But China could be subject to huge new tariffs on exports to the US if Republican candidate Donald Trump wins the US presidential election in November. Tariffs would have to be at 40-50pc to deter Chinese EV imports, consultancy Rhodium says — the EU on 29 October announced a slew of tariffs on Chinese EVs of up to 45pc. Western countries would add $6 trillion to global energy transition costs if they decouple from Chinese products, Liu says. China's carbon emissions by source China's industrial carbon emissions Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US court set to weigh biofuel blend mandates

31/10/24

US court set to weigh biofuel blend mandates

New York, 31 October (Argus) — A US court on Friday will weigh some novel issues that could affect enforcement of the Renewable Fuel Standard (RFS), the federal program that sets minimum biofuel blending levels for domestic motor fuel supplies. The Environmental Protection Agency (EPA) in last year's RFS regulation required refiners and importers to blend increasing volumes of renewable fuel from 2023-2025. But the rule differed from past obligations in a crucial way. While the RFS law set annual volume targets of cellulosic, advanced and conventional biofuels through 2022, it tasked EPA with setting volumes in subsequent years by balancing factors such as the environmental impacts of biofuels, energy security, expected production and consumer costs. In a consolidated case to be heard Friday by the US Court of Appeals for the District of Columbia Circuit, environmental groups and oil refiners are separately challenging aspects of how the EPA applied those factors in setting 2023-25 volumes. The court has previously affirmed the legality of many RFS rules. "Past cases always give you some perspective on how the DC court might see it," said Susan Lafferty, a partner at law firm Holland & Knight. "But the DC court could also say, ‘not relevant anymore because this is a different part of the statute that we are working with.'" Refiners say EPA misapplied the criteria, upping compliance costs more than necessary by setting targets for cellulosic and conventional biofuels too high and targets for advanced biofuels too low. They also challenge EPA's balancing of potential impacts, noting that the agency assumed that all parties can easily pass the costs of compliance on to consumers. In a separate case this year, the DC Circuit discarded EPA rejections of program waiver petitions, in part because judges disagreed that refiners can easily pass on the cost of Renewable Identification Number (RIN) credits used to show compliance with the RFS program. EPA used this pass-through theory in the 2023-2025 rule "like a magic wand, waving it around to dismiss any argument that the rule will cause harm", the American Fuel and Petrochemical Manufacturers and small refineries said in a case filing. Lafferty expects the judges at Friday's hearing to probe the extent to which EPA's volumes relied on this pass-through theory, "a policy that now this very court has gutted." Environmentalists have similarly targeted EPA's cost analysis, arguing that the agency downplayed the environmental drawbacks of growing crops for energy. The Center for Biological Diversity and the National Wildlife Federation argue that EPA has legal discretion to set post-2022 volumes for corn- and soybean-derived biofuels as low as zero. EPA counters that the court owes the agency deference in evaluating scientific data and making predictive judgments. And biofuel groups that have intervened argue that the program is designed to require more biofuel production even if there are no formal volume requirements in law anymore. While EPA's post-2022 authority to set blend mandates is a new issue, the DC Circuit has handled various cases about EPA's implementation and has generally been deferential to the agency's volume decisions. The court this year upheld 2020-2022 targets. In a 2019 decision, the court kept volumes in place , despite telling EPA to more deeply weigh endangered species impacts. While the court might take issue with some aspects of EPA's latest rule, including the agency's lateness in finalizing volumes, judges could again be reluctant to upend fuel markets if they find only small oversights. Depending on how skeptical judges appear about EPA's arguments on Friday, the case could cause concern for biorefineries. A decision is expected next year, meaning any order for EPA to better justify its decisions or go back to the drawing board would likely fall to the next president's administration. On the panel for Friday's hearing are two judges familiar with the program: Democratic appointee Cornelia Pillard, who wrote the opinion this year upholding 2020-2022 blend mandates, and Republican appointee Gregory Katsas, who dissented and said those volumes were excessive. The third judge on the panel is Democratic appointee J. Michelle Childs. RINcrease or decrease RIN market activity has thinned as participants await the results of the court case and November's presidential election. In its latest rule, EPA aimed to provide a clearer picture over a longer timeline by finalizing volumes over multiple years. But the agency underestimated the growth in renewable diesel production, partly because of unexpectedly high feedstock imports. The result has been persistent oversupply, which took D4 biomass-based diesel credit prices from around 150¢/RIN in spring last year to as low as 42¢/RIN a year later according to Argus assessments. Multiple refiners have consequently dialed back biofuel production. In the past, RIN prices have proven sensitive to legal developments as traders anticipate supply and demand shifts. Prices softened this summer after the DC Circuit vacated small refinery waivers, leaving it unclear whether many facilities would have to buy RIN credits at all. By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: EU-GCC eye alliance anchored in energy, security

31/10/24

Q&A: EU-GCC eye alliance anchored in energy, security

Dubai, 31 October (Argus) — Russia's invasion of Ukraine in 2022, and the start of the war in Gaza last year hastened the strengthening of relations between the EU and the Gulf Co-operation Council (GCC) ꟷ something both blocs had long been striving for. Argus sat down with the EU's special representative for the Gulf region and former Italian foreign minister Luigi di Maio at the Future Investment Initiative in Riyadh this week to discuss his hopes for the future of the relationship. You spoke at the conference about a comprehensive EU-GCC trade agreement. Such a thing has been on the table for a while without really moving forward. Could the first ever EU-GCC summit two weeks ago in Brussels provide the push needed for it to happen? The final statement of the summit clearly emphasised the importance of finalising the negotiation in a positive way, and reaching the free trade agreement at a regional level as soon as possible. Then we can start tailor-made negotiations on trade and investments. This can work in complementarity with the free trade agreement, for instance, on investments and energy co-operation bilaterally. This doesn't mean we are going to kill the free trade agreement at the regional level, but there are some sectorial co-operations that we can implement. This is a very good starting point. I would say the summit was ‘the message' because although our co-operation agreement dates back to the late 1980s, it was the first ever summit. Of course, that also testifies to the gap that we have to fill. This is why the EU approved the new strategy and why there is a special representative to implement this strategy. And why we are working with the Gulf countries to negotiate and implement [it] as soon as possible. Riyadh is where we opened the first ever European Chamber of Commerce in the GCC. The EU and Saudi Arabia are going to sign an energy co-operation MoU by the end of the year. The text has been discussed, and now we will work for the signature. What are the elements of this energy agreement with Saudi Arabia? It is a new framework to co-operate, particularly, on renewables, hydrogen, and technologies linked to renewables. This is very important, and currently in the hands of the EU commissioner for energy, Kadri Simson, and Prince Abdulaziz bin Salman, the energy minister of Saudi Arabia. Speaking of hydrogen, Prince Abdulaziz spoke here about Saudi Arabia being one of the lowest-cost producers of hydrogen. We also know that hydrogen is a major element of the India-Middle East-Europe Economic Corridor [IMEC] agreement signed at the G20 summit in New Delhi. Is the IMEC project still on the table? And is this growing hydrogen relationship between the EU and the GCC part of it? First, the lesson we, the EU, learned is diversification. So, it's very important to implement our diversification policy on any kind of energy source. It is not only linked to oil, gas or hydrogen, or in general, technologies, raw materials and production. Then there is the issue of how much we can count on the suppliers. The Gulf countries like Saudi Arabia, the UAE, Qatar and others have always been reliable partners. This is why we see the energy co-operation as a pillar of our partnership. On hydrogen, there is a mutual interest to meet our ambitions. Our ambition, according to the European Commission's REPowerEU proposal, is for the EU to produce 10mn t of hydrogen on its soil by 2030, and import another 10 mn t. Saudi Arabia, the UAE and Oman are working with our companies and member states to export hydrogen to Europe. And I think the development of technologies and new projects around that will be at the core of our future co-operation. If you look at Vision 2030, here in Saudi Arabia, but even in the UAE and in the other countries, many of the goals are in line with our REPowerEU, NextGenerationEU, or the European Green Deal proposals. So there is momentum, and we are taking it. We are trying to fill the gap of the past. And the very important thing, not only about hydrogen, but even about the climate co-operation that is in our final statement [of the EU-GCC summit], is that it's not an "Una tantum" [one-off] event. We are working to have the ministerial foreign ministers' meeting in Kuwait next year and the next EU-GCC summit in Saudi Arabia in 2026. We have a long road ahead to implement the deliverables of the last summit, but also to improve our co-operation on renewables. There was a significant breakthrough at Cop 28 with the mention of fossil fuels in the final declaration. Do you see the growing EU-GCC relationship as a leverage to push GCC countries on their climate agendas and goals? The approach should not be that we push them on their climate agendas. We are working together. And thanks to the multilateral relations, ambitions and policies that we have, we can, even in view of Cop 29, co-ordinate in the same way we did at Cop 28. This is very important, because thanks to their influential foreign policy, on Africa, on central Asia, even sometimes on Latin America, and our ambitions and partners around the world, we can merge our relations to take another step forward on climate policy. But as you said, Cop 28 was historic, as consensus was the most ambitious result of the UN climate Cops, and I think we have to continue on this path together. It is not a matter of pushing someone. It's a matter of co-operation. Our level of partnership with GCC has to switch at a strategic level. We want to create a strategic partnership on peace and prosperity. This is our agreed ambition on both sides. Speaking of peace and prosperity, Iran is involved indirectly in the Russia-Ukraine conflict, and its direct confrontation with Israel leaves the GCC sandwiched in the middle. How do you see the EU working with the GCC to attain peace and prosperity, given the increased insecurity in the region? We share with the GCC the interest of peace, prosperity and stability of the region. Because if you look at these countries, what are they doing on Ukraine, like returning children and prisoner exchanges… They are very active, and we appreciate their efforts. So my perception is that the more we work with the GCC on regional stability, the more we will achieve results, because we have a common agenda. They will be very important for the future of the two-state solution, but also for the stability of Lebanon. Even for conveying messages of de-escalation to Iran. The channels with Iran have to be open… to convey messages about nuclear, ballistic missiles, about weapons to Russia for use against Ukraine, and the ‘Axis of Resistance' policy in the region, about the Red Sea and the freedom of navigation. We have to use all the channels we have and the channels the GCC have are precious because of the normalisation processes in the region, just like the Iran-Saudi Arabia one. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Guatemala's power capacity tender opens tomorrow

30/10/24

Guatemala's power capacity tender opens tomorrow

New York, 30 October (Argus) — Guatemala will open a tender for 1.2GW of power capacity on Thursday. The power capacity tender will include supply contracts for 15 years. It will have two components, one to add capacity to existing plants and another for new technologies. It will be the first tender of this kind in eight years. The new capacity is critical as demand is expanding and Guatemala is looking at options to take advantage of opportunities for nearshoring. "This tender is very important, because demand is increasing while supply has been static," Gabriel Velasquez, director of energy planning in the energy ministry, said on the sidelines of the Latin American Energy Organization (Olade) annual meeting in Paraguay. "We want to prioritize renewables, but the technologies chosen will depend on the economic offers we receive." The ministry will also launcha tender for transmission lines in December, the first in 10 years. It will include 483km (300 miles) of 230kV, 138kV and 69kV lines. It will also include two substations. The ministry is simultaneously talking with investors and multilateral development banks to provide power to isolated communities. Velasquez said this could include microgrids and distributed generation using solar technology. Half of Guatemala's electricity currently comes from hydroelectric sources, with another 45pc coming from thermal generation and the rest from other technologies. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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